EDAP TMS S.A.

Greetings and welcome to the E-DAP TMS first quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Francis of LifeSciAdvisors. Thank you. Please go ahead.

Good morning. Thank you for joining us for the EDAP TMS First Quarter 2023 Financial and Operating Results Conference Call. On today's call, we'll hear from Ryan Rhodes, Chief Executive Officer, Francois Adich, Chief Financial Officer, and Ken Mobik, Chief Financial Officer of the U.S. Subsidiary. Before we begin, I would like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plans. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. I would now like to turn the call over to EDAP's Chief Executive Officer, Ryan Rhodes. Ryan?

Thank you, John, and good morning, everyone. I will start today's call by providing highlights from the first quarter of 2023 and then turn the call over to Ken Mobeck, our US CFO, who will then present the corresponding details of financial performance. After reporting a record fourth quarter, I'm pleased to note that our strong business execution has continued into 2023, reporting our strongest ever first quarter revenue performance. In Q1 2023, we recorded revenue of 14.8 million euros or 15.9 million U.S. dollars, which is a year-over-year increase of 13.8% over the first quarter of 2022. Focal One robotic HIFU sales continue to drive our strong top-line performance. During this last quarter, we were successful in placing seven Focal One units, including six equipment sales and one operating lease. One of the noted placements included UCLA Medical Center located in Los Angeles, California. With the addition of UCLA, we have now placed focal one robotic HIFU systems at each and every University of California academic teaching hospital. In addition, last quarter we placed our first focal one systems in the states of Minnesota and Tennessee, reflecting our expanding and growing geographical presence across the U.S. Lastly, we placed a focal one system at Santa Barbara Cottage Hospital, and we also placed our first focal one system at a Kaiser Permanente Hospital. As market demand for focal one high food technology continues to grow, we are pleased to note that more community hospitals are adopting our technology. Not surprisingly, the leading academic urology focused hospitals were amongst the first adopters of Focal-1 robotic HIFU. We now see a growing interest in Focal-1 technology and large community urology practices, indicating market demand is likely to increase as we further penetrate this key target market segment. An account like Kaiser, which is a leader in integrated managed care, further validates that HIFU is part of a comprehensive approach to prostate cancer care. We believe that the continued expansion of FOCA-1 robotic HIFU amongst academic medical centers, community hospitals, and integrated health systems demonstrates the value that this treatment option provides in any care setting for the most common cancer amongst men. As noted on prior calls, a significant increase in CMS reimbursement for hospitals performing a FOCA-1 procedure went into effect at the beginning of 2023. More favorable ROI economics compel hospitals to invest in FOCA-1 HIFU as a necessary treatment option for a subset of their patients diagnosed with prostate cancer. We expect this dynamic to help us maintain momentum throughout 2023 and beyond. Going forward, we also anticipate continued reimbursement expansion from commercial payers who often follow CMS's lead in determination of policy. While more favorable reimbursement is clearly an important factor in providing access to focal one HIFU technology, we also believe that generation of high-quality patient data and treatment outcomes through rigorous clinical studies is an integral part of driving long-term demand for our robotic HIFU technology. During the first quarter, we announced positive results from two clinical trials and studies, one in endometriosis and the other in prostate cancer. The principal investigators for both studies were well-recognized key thought leaders from leading international academic centers. We were pleased to note that the results from each trial clearly underscore the safety, efficacy, and additional symptom and quality of life benefits of Focal-1 HIFU therapy. The Endo-HIFU R1 Phase II study evaluated the safety of therapeutic HIFU for the treatment of rectal endometriosis, which results reported in January. Of 60 patients evaluated, 96.7% demonstrated positive safety with no or non-significant Clavian 1 adverse events. Only 3.3% presented Clavian 2 complications and zero patients presented Clavian 3 complications. A broad range of debilitating symptoms associated with endometriosis improved for the focal one group, as did almost all evaluated quality of life-based criteria at one, three, and six months. MRIs were performed at six months, also demonstrated a significant reduction of lesion volume. To confirm the positive results from the phase two study, we plan to initiate a phase three study in the second quarter of this year. As a level one study, we anticipate this being a multi-center, double-blind, randomized controlled clinical trial enrolling approximately 60 subjects across eight centers in France with 30 subjects randomized to each group. The primary efficacy endpoint will be acute pelvic pain three months post-procedure. If results from this phase three study are similar to the phase two results, EDAP would have the strongest clinical evidence to date demonstrating the utility of therapeutic HIFU to address this painful and debilitating condition. Based on the results thus far from this program, we believe Focal-1 HIFU could become an important new treatment option that would allow women suffering from deep infiltrating endometriosis to avoid the significant comorbidities associated with highly invasive surgical resection of the bowel or rectum. Now let me turn to some very exciting clinical data that we recently announced at the 38th Annual Congress of the European Association of Urology. Results from the largest multicenter non-inferiority study ever conducted to prospectively evaluate HIFU against radical prostatectomy as a first-line treatment for patients with localized prostate cancer demonstrated a salvage treatment-free survival rate at 30 months of 90.1% in the HIFU-treated arm as compared to 86.8% in patients who underwent radical prostatectomy. Investigators found that the risk of salvage treatment was greater than 1.2-fold higher after radical prostatectomy than with FOCAL-1. Furthermore, ICS scores as a measure of urinary incontinence were significantly lower after FOCAL-1 HIFU, and IIEF scores as a measure of erectile function decreased significantly less after HIFU than after radical prostatectomy. This is even more remarkable considering the FOCAL-1 treated patient group was on average 9.6 years older than the radical prostatectomy patients. Together, these two studies provide further clinical evidence supporting the efficacy of Focal-1 HIFU, enabling patients to maintain a higher level of baseline functionality while demonstrating good oncologic outcomes. Following our strong showing at the EAU meeting, our momentum continued into this year's American Urological Association meeting held just a couple of weeks ago in Chicago, where feedback and enthusiasm for focal therapy from attending urologists and other thought leaders was universally very positive. AUA is widely recognized as the largest meeting of academic and practicing urologists globally, also attracting a large number of investors and research analysts with a defined focus in showcasing the latest advances in urologic medicine. This year, EDAP had its largest AUA presence ever. Several plenary presentations and instructional courses were delivered by leading academic urologists showcasing FOCAL1's ability to meet accepted oncological standards for the management of prostate cancer while preserving sexual function and urinary control. Of particular interest was the FOCAL1 scientific abstract presented by the prestigious Martini Clinic in Hamburg, Germany. The Martini Clinic has the largest prostate cancer treatment program in the world. The AUA abstract presented by the Martini Clinic highlighted seven years' experience utilizing FOCAL-1 high-intensity focused ultrasound in 164 patients with prostate cancer. All treatments were established as primary therapy and monitoring definitions followed a very strict protocol. The oncologic outcomes showed excellent cancer control with only 7% significant infield recurrence and 91.5% radical treatment-free survival at seven years. On the functional side, very few complications were reported with 91.5% of the patients maintaining their baseline urinary continence and 85% maintaining their baseline erectile function. These results were impressive as we continue to further educate clinicians, patients, and providers on the benefits of FOCAL-1 robotic HIFU. Additionally, throughout the AUA meeting, EDAP was very busy giving numerous customers the hands-on ability to use focal one in a simulated prostate ablation procedure. They were able to see in action the robotic positioning system, advanced imaging, and fusion capabilities while setting up a prescribed ablation treatment plan. To further drive FOCAL-1 awareness and recognition, in April we held a live global procedure broadcast featuring a FOCAL-1 HIFU treatment performed by Dr. Andrea Brew and Dr. Amir Labachi, both who are assistant professors of clinical urology at Keck Medicine of the University of Southern California. USC also happens to be the first U.S. hospital institution to acquire and adopt EDAP's robotic HIFU technology. This patient procedure broadcast enabled us to demonstrate the many important features and benefits of our robotic HITHU technology platform to physicians, clinicians, and investors from around the world. I'd now like to briefly discuss our exciting ExactView 29 megahertz micro ultrasound system developed for targeted biopsies in prostate cancer. XactView's proprietary technology allows urologists unparalleled visualization of prostate ultrasound images, thus leading to the real-time detection of suspicious areas necessary for performing precise prostate biopsies. In the first quarter of 2023, we sold eight XactView units. Operating at 29 megahertz, the platform can generate micro-ultrasound resolution that is comparable to MRI. with a 300% improvement over conventional ultrasound technology. In April, we announced that ExactView received commercial approval from Japan's Pharmaceutical and Medical Devices Agency. The Japanese market is the second largest global market for advanced medical device technology with prostate cancer as the most common cancer diagnosis in Japanese men, with over 100,000 new prostate cancer cases diagnosed annually. We have an existing strong presence of urology devices in Japan, and now with adding the revolutionary micro ultrasound technology, we have the ability to significantly expand our business in the country. Before I turn the call over to Ken to review our financial performance in the last quarter, I just want to again acknowledge our strong cash position, which is a critical factor given the broader weakness in the capital markets. We ended the first quarter with and 58.3 million euros, or 63.4 million US dollars. Maintaining a strong balance sheet enables us to make the necessary investments to fully maximize the opportunity for Focal One, ExactView, and our broader portfolio of innovative technologies. As our sales pipeline continues to expand, it is becoming increasingly evident that the investments in our key technology platforms and commercial activities are helping drive demand in the market for our product offerings. With that, I will now turn it over to our U.S. CFO, Ken, to discuss the financials. Ken?